Appendix E
Australian Accounting Standards Board work programme
Progress made on 2006-07 work programme
The AASB’s progress on its 2006-07 work programme is set out below:
IASB-related projects involving significant AASB input
IASB-related projects involving significant AASB input (continued)
IASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB)
IASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB) (continued)
IFAC-IPSASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB)
New Zealand convergence
In adopting the IASB standards, both the AASB and the New Zealand FRSB originally removed optional treatments, added some disclosure requirements and catered for not-for-profit entities. In some cases, the amendments and additions made by the AASB are different from the amendments and additions made by the FRSB.
The AASB has reviewed all of its Australian equivalents to IFRSs in 2006-07, which involved the issue of two Exposure Drafts. As a result of the review, more than three-quarters of the Australian equivalents to IFRSs have been amended to include the options contained in IFRSs and remove some of the additional Australian disclosure requirements. Some additional disclosure requirements remain and the not-for-profit paragraphs also remain. In the meantime, the FRSB has finalised its New Zealand equivalents to IFRSs (which are mandatory from 1 January 2007).
As a consequence of the work undertaken in Australia and New Zealand in 2006-07, the two sets of Standards have been converged to a more significant degree.
The Boards have undertaken to work together to remove as many of the remaining differences as possible in keeping with the need for Trans-Tasman cooperation on regulatory matters.
The AASB and the FRSB have also agreed to share resources to the extent feasible and in most cases have allocated one or other of the Boards to be the prime Board responsible for monitoring the work of the IASB and the IPSASB.
Domestic GAAP/GFS convergence projects
Other domestic projects
Other domestic projects (continued)
AASB/IFRIC Interpretations
Work programme 2007-08
During 2006-2007, the Board reaffirmed its view that there are four policy areas on which it should focus, and which should guide the content and timing of its work programme. The Board will primarily continue to work on IFRS developments, whilst working on domestic and international work on not-for-profit entity issues, particularly in the public sector.
The four policy areas remain as follows:
- International role — to seek to influence the agenda, priorities and standards of the IASB and the IPSASB by:
- participating in IASB research projects in a manner such that our contribution is recognised;
- providing staff to IASB to work on selected standards setting project teams and from time to time engage in staff secondments to the IASB;
- simultaneously issuing (to the extent feasible) Australian versions of Exposure Drafts and Invitations to Comment containing a tentative AASB view of the proposal(s);
- responding to all significant Exposure Drafts of the IASB and IPSASB in the name of the AASB or the AASB staff;
- providing technical support to Australian representatives at IASB and IPSASB meetings and project meetings;
- closely monitoring the progress of selected IASB and IPSASB projects with the objective of alerting the constituency to forthcoming significant issues and to indicate to the IASB and IPSASB information about Australian views on such issues at the earliest possible time; and
- establishing and maintaining working relationships with other standard setters in our region, in particular New Zealand, and also establishing and maintaining working relationships with equivalent organisations of high standing in other parts of the world.
- Interpretations — promote globally consistent application and interpretation of accounting standards and continue to be involved in interpreting standards relating to a purely local standard, or to a sector not covered by the IASB or where an international interpretation of an international standard is not forthcoming (this latter situation is expected to be rare), and including:
- on discovering unacceptable diversity of accounting treatments arising from differences in interpretation, in the first instance, attempting to have the matter resolved at an international level; and
- making arrangements to have all international Implementation Guidance and Bases for Conclusions relating to international accounting standards freely available on its website to its Australian constituents.
- Communications — to improve communication with constituents and the use of constituent input by:
- developing communications processes and policies to facilitate effective and timely engagement with stakeholders, stakeholder groups and with bodies we are seeking to influence; and
- establishing a communication function and developing a broad communications strategy.
- Transaction neutrality — to continue promulgating standards that deal with like transactions and events in a like manner by using IFRSs as the core direction for accounting treatments, but recognising that the IASB has written IFRSs specifically for the for-profit sector. In view of the different business models in the other sectors, the AASB will amend the IFRSs, where necessary in order that they are also appropriate for use in the not-for-profit private and not-for-profit public sectors.
Based on the above policies, the Board discussed its key aims for 2007 at its February 2007 meeting and identified six top priorities (A list projects) and a further five high priorities (B list projects). The relevant project areas are shown below.
A list projects
GAAP/GFS Harmonisation — implications for Whole of Government, including the PNFC and PFC sectors
Whole of Government, Government Department, and Local Government review
Gaps in GAAP for public sector not-for-profit entities
Reporting Entity and GPFR/SPFR issues, including Differential Reporting/SMEs
Superannuation plans
Revenue from Non-Exchange Transactions (with New Zealand)
B list projects
Control of an asset/entity in the not-for-profit/public sector
Insurance Phase II, including participation in IASB Project Team
Conceptual Framework (IASB/FASB)#
Conceptual Framework (IPSASB)#
AASB staff are acting as IPSASB project team members, with responsibility for developing papers on the Reporting Entity topic.
# The Chairman and certain AASB staff participate in a Monitoring Group comprising standard setters from Australia, Canada, New Zealand, the United Kingdom and the IPSASB, which comments on the IASB/FASB Conceptual Framework Project Board papers on an ongoing basis from a not-for-profit entity perspective.
Service Concessions (IPSASB)
AASB staff will be acting as an IPSASB project team members, with responsibility for developing papers on aspects of the topic. The AASB has also established a Panel to develop recommendations to the AASB regarding the grantor accounting as a result of the issue of Interpretation 12 Service Concession Arrangements.
Other projects and activities
The following tables show the other projects of the AASB not included among the highest priorities for 2007-08.
1 IASB-related projects involving significant AASB input
2 IASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB)
2 IASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB) (continued)
Where the AASB has designated a project as one that it should monitor closely, to the extent possible the Board intends to consider IASB papers as they are considered by the IASB, and to provide the IASB with comments and feedback on a continuous and timely basis.
Other IASB projects will be monitored as closely as possible by AASB staff, which will report issues of concern to the Board on an exception basis.
3 IFAC-IPSASB-related projects involving monitoring by the AASB (in conjunction with New Zealand FRSB)
Where the AASB has designated a project as one that it should monitor closely, to the extent possible the Board (or a subcommittee of the Board or the AASB staff) intends to consider IPSASB papers as they are considered by the IPSASB, and to provide comments and feedback on a continuous and timely basis.
Other IPSASB projects will be monitored as closely as possible by AASB staff, which will report issues of concern to the Board on an exception basis.
4 New Zealand Convergence exercise
In adopting the IASB standards, both the AASB and the New Zealand FRSB have removed optional treatments, added some disclosure requirements and catered for not-for-profit entities. In some cases, the amendments and additions made by the AASB are different from the amendments and additions made by the FRSB. It may be considered that, since the Boards are adopting the same set of IASB standards, they would end up with the same standards. However, the respective starting points and regulatory environments of the two Boards are different and have given rise to some differences in the ‘adopted standards’. These differences are becoming fewer as the two jurisdictions cooperate and as both jurisdictions remove differences from IFRSs.
The Boards have undertaken to work together to remove as many differences as possible in keeping with the need for Trans-Tasman cooperation on regulatory matters.
The AASB and the FRSB have also agreed to share resources to the extent feasible and in most cases have allocated one or other of the Boards to be the prime Board responsible for monitoring the work of the IASB and the IPSASB.
5 Domestic GAAP/GFS Convergence Project
6 Other domestic projects
7 AASB/IFRIC Interpretations
1 ‘Convergence’ denotes a project aimed at achieving greater convergence between the IASB and the FASB.
2 ‘Convergence’ denotes a project aimed at achieving greater convergence between the IASB and the FRSB.